Religions:
Orthodox (includes Ukrainian Autocephalous Orthodox (UAOC), Ukrainian Orthodox - Kyiv Patriarchate (UOC-KP), Ukrainian Orthodox - Moscow Patriarchate (UOC-MP), Ukrainian Greek Catholic, Roman Catholic, Protestant, Muslim, Jewish
Note: Ukraine's population is overwhelmingly Christian; the vast majority - up to two-thirds - identify themselves as Orthodox, but many do not specify a particular branch; the UOC-KP and the UOC-MP each represent less than a quarter of the country's population, the Ukrainian Greek Catholic Church accounts for 8-10%, and the UAOC accounts for 1-2%; Muslim and Jewish adherents each compose less than 1% of the total population (2013 est.)

International disputes: 1997 boundary delimitation treaty with Belarus remains unratified due to unresolved financial claims, stalling demarcation and reducing border security; delimitation of land boundary with Russia is complete with preparations for demarcation underway; the dispute over the boundary between Russia and Ukraine through the Kerch Strait and Sea of Azov is suspended due to the occupation of Crimea by Russia; Moldova and Ukraine operate joint customs posts to monitor transit of people and commodities through Moldova's break-away Transnistria Region, which remains under the auspices of an Organization for Security and Cooperation in Europe-mandated peacekeeping mission comprised of Moldovan, Transnistrian, Russian, and Ukrainian troops; the ICJ ruled largely in favor of Romania in its dispute submitted in 2004 over Ukrainian-administered Zmiyinyy/Serpilor (Snake) Island and Black Sea maritime boundary delimitation; Romania opposes Ukraine's reopening of a navigation canal from the Danube border through Ukraine to the Black Sea.

Geography

Located in southeast Europe, the country consists largely of fertile
black soil steppes. Mountainous areas include the Carpathians in the
southwest and the Crimean chain in the south. Ukraine is bordered by
Belarus on the north, by Russia on the north and east, by the Black Sea on
the south, by Moldova and Romania on the southwest, and by Hungary,
Slovakia, and Poland on the west.

Government

Constitutional republic.

History

Ukraine was known as “Kievan Rus” (from which Russia
is a derivative) up until the 16th century. In the 9th century, Kiev was
the major political and cultural center in eastern Europe. Kievan Rus
reached the height of its power in the 10th century and adopted Byzantine
Christianity. The Mongol conquest in 1240 ended Kievan power. From the
13th to the 16th century, Kiev was under the influence of Poland and
western Europe. The negotiation of the Union of Brest-Litovsk in 1596
divided the Ukrainians into Orthodox and Ukrainian Catholic faithful. In
1654, Ukraine asked the czar of Moscovy for protection against Poland, and
the Treaty of Pereyasav signed that year recognized the suzerainty of
Moscow. The agreement was interpreted by Moscow as an invitation to take
over Kiev, and the Ukrainian state was eventually absorbed into the
Russian Empire.

After the Russian Revolution, Ukraine declared its independence from
Russia on Jan. 28, 1918, and several years of warfare ensued with several
groups. The Red Army finally was victorious over Kiev, and in 1920 Ukraine
became a Soviet republic. In 1922, Ukraine became one of the founders of
the Union of Soviet Socialist Republics. In the 1930s, the Soviet
government's enforcement of collectivization met with peasant resistance,
which in turn prompted the confiscation of grain from Ukrainian farmers by
Soviet authorities; the resulting famine took an estimated 5 million
lives. Ukraine was one of the most devastated Soviet republics after World
War II. (For details on World War II, see Headline History, World
War II.) On April 26, 1986, the nation's nuclear power plant at Chernobyl
was the site of the world's worst nuclear accident. On Oct. 29, 1991, the
Ukrainian parliament voted to shut down the reactor within two years' time
and asked for international assistance in dismantling it.

An Independent Nation

When President Leonid Kravchuk was elected by the Ukrainian parliament
in 1990, he vowed to seek Ukrainian sovereignty. Ukraine declared its
independence on Aug. 24, 1991. In Dec. 1991, Ukrainian, Russian, and
Belorussian leaders cofounded a new Commonwealth of Independent States
with the capital to be situated in Minsk, Belarus. The new country's
government was slow to reform the Soviet-era state-run economy, which was
plagued by declining production, rising inflation, and widespread
unemployment in the years following independence. The U.S. announced in
Jan. 1994 that an agreement had been reached with Russia and Ukraine for
the destruction of Ukraine's entire nuclear arsenal. In Oct. 1994, Ukraine
began a program of economic liberalization and moved to reestablish
central authority over Crimea. In 1995, Crimea's separatist leader was
removed and the Crimean constitution revoked.

In June 1996, the last strategic nuclear warhead was removed to Russia.
Also that month parliament approved a new constitution that allowed for
private ownership of land. An agreement was signed in May 1997 on the
future of the Black Sea fleet, by which Ukrainian and Russian ships will
share the port of Sevastopol for 20 years.

A Struggling Economy and a Troubled Government

The Russian financial crisis in fall 1998 led to severe problems for
the Ukrainian economy, which is dependent on Russia for 40% of its foreign
trade. Ukraine remains saddled with its Soviet-era economy, and most of
its major industries are still under state control. Corruption is rampant,
and as a result, Western investors have shown only minimal interest. The
election of the reform-minded Viktor Yushchenko as prime minister in Dec.
1999, however, was greeted with optimism by the West. He was also highly
popular among Ukrainians. But in April 2001, he was dismissed in a
no-confidence vote engineered by Communist hard-liners and Ukrainian big
business.

Violent demonstrations rocked Ukraine in the winter of 2001, with
protesters demanding the resignation and impeachment of authoritarian
president Leonid Kuchma. Critics accused Kuchma of involvement in the
murder of a journalist critical of government corruption. Kuchma was
recorded on tape urging that the journalist be disposed of.

In 2004, Kuchma announced he would be retiring. A presidential election
pitted Viktor Yushchenko, the former reformist prime minister, against
Viktor Yanukovich, the current prime minister and Kuchma's chosen
successor. The campaign was an especially dirty one. Yushchenko was nearly
fatally poisoned with dioxin and had to be hospitalized for several weeks
shortly before the election. His doctors predicted that the poisoning will
affect his health for years to come. In the Nov. 21 runoff election, Prime
Minister Yanukovich received 49.5% of the vote and Yushchenko 46.5%.
International monitors declared the elections massively fraudulent.
Hundreds of thousands of Yushchenko's supporters took to the streets of
the capital and other cities in protest, and what became known as the
Orange Revolution (after Yushchenko's signature campaign color) continued
full strength over the next two weeks. On Dec. 3, the supreme court
invalidated the election results. On Dec. 8, parliament voted in favor of
an overhaul of Ukraine's political system, amending the constitution to
reform election laws and transferring some presidential powers to the
parliament. In the final presidential runoff on Dec. 26, Yushchenko won
52% of the vote to Yanukovich's 44.2%. On Jan. 23, 2005, Viktor Yushchenko
was sworn in. Fellow reformist Yulia Timoshenko became the prime minister.
But within the year Yushchenko's reformist reputation was tarnished by his
administration's infighting and allegations of corruption. He fired Prime
Minster Timoshenko and her entire cabinet in Aug. 2005. The crisis shook
the public's belief in the Orange Revolution, and Yushchenko's continued
inattentiveness to governmental corruption has further disillusioned the
public.

Gas Causes an Energy Crisis

Russia suddenly quadrupled the price of gas sold to Ukraine in Jan.
2006, triggering an energy crisis in the country. Ukraine maintained that
Russia, angry at Ukraine's growing pro-Western stance and its loss of
influence in the region, was attempting to damage its economy. Russia
maintained that the rise in prices was purely a commercial consideration.
Russia briefly stemmed the flow of gas to Ukraine to force the country to
accept the higher prices, sending alarms throughout Europe—a quarter
of Europe's gas supplies come from Russia via Ukraine's pipelines. A
compromise was eventually reached, with Ukraine agreeing to pay about
double its current price. Furious at the unfavorable terms of the deal,
Ukraine's parliament then sacked the government of prime minister Yuri
Yekhanurov. The prime minister, however, maintained the vote was
nonbinding.

In parliamentary elections on March 26, 2006, Yushchenko's party fared
badly, receiving only 14% of the vote. His two major opponents did
considerably better: Viktor Yanukovich, the former prime minister whom
Yushchenko had defeated in 2004, received the largest percentage, 32%, and
Yulia Timoshenko, the former prime minister whom Yushchenko had sacked
earlier in 2005, won 32% of the vote. It took until August before a
strange ruling coalition was cobbled together: Yushchenko appointed his
arch-rival Viktor Yanukovich as prime minister—the very leader the
Orange Revolution had defeated in 2004. Yanukovich has vowed to strengthen
Ukraine's ties with Russia once again.

Several Rounds of Elections and Another Gas Crisis

Yushchenko, accusing Yanukovich of attempting to consolidate power,
dissolved Parliament in April 2007. After extended negotiations and
political posturing, the rivals agreed to hold parliamentary elections in
the fall. The elections in September proved inconclusive, and after weeks
of talks, the parties that rose to power during the Orange Revolution of
2004 formed a coalition.

On Oct. 9, 2008, after weeks of political turmoil that saw that
collapse of his pro-Western coalition, President Viktor Yushchenko signed
an order to dissolve Parliament and called for new elections.

A dispute over debts and pricing of gas supplies between Russia and
Ukraine led Gazprom, the major Russian gas supplier, to halt its gas
exports to Europe via Ukraine, affecting at least ten EU countries in
January 2009. About 80% of Russian gas exports to Europe are pumped
through Ukraine. Russia and Ukraine blamed each other for the disruption
to Europe's energy supply.

Viktor Yushchenko, who led Ukraine's Orange Revolution in 2004, resoundingly lost the first round of the Ukrainian presidential election. Former prime minister Viktor Yanukovich won the second round in February 2010, defeating Prime Minister Yulia Tymoshenko by 3.48%. International observers declared the election fair, but Tymoshenko alleged election fraud. She resigned in March, after losing a confidence vote in Parliament. Yanukovich formed a government in March, with Mykola Azarov, a Russian-born former finance minister, as his prime minister. He promised voters that he had moved beyond his thuggish and intimidating demeanor and vowed to allow an free media, government transparency, and an active opposition, and to reach out to the West. Once elected, however, Yanukovich resumed his intolerance for the opposition and opened investigations into opposition leaders. Tymoshenko was a prime target, and in June 2011 she was arrested for exceeding her authority when she signed a gas deal with Russia in 2009. The move had the unintended effect of angering Russia, which saw the arrest as an affront to Prime Minister Vladimir Putin, who signed the deal, and the European Union, which profited from the agreement. She was convicted in October 2011 and sentenced to seven years in prison. The verdict was widely criticized as being political and to punish her for her continued participation in politics.

Ally of Former Prime Minister Jailed

On April 13, 2012, the United States condemned the imprisonment of former Defense Minister Valery Ivashchenko. Ivashchenko was found guilty of abusing his power while in office. He was sentenced to five years in prison. Ivashchenko, who has already been in custody for 18 months, denied the charges. The U.S. released a statement that the verdict was "the latest example of selective justice."

Yulia Tymoshenko, the former prime minister serving a seven-year prison term, accused current President Yanukovych of wanting to persecute all of his political opponents. In December 2011, Tymoshenko was moved to a prison camp 300 miles away from Kiev. Many suspect the move was to keep her away from the public and the media. Tymoshenko's former Interior Minister was also found guilty and given a four year sentence.

2012 Language Bill and New Election

On July 3, 2012, Parliament passed a bill that reaffirmed Ukrainian as the country's national language. The bill also allowed local governments to give official status to other languages, including Russian, as long as the other languages are spoken by at least 10% of the region's residents. Opposition argued that the new bill violated the Constitution, which designated Ukrainian as the only official language. Critics of the bill feared that giving the Russian language official status would alienate the Ukraine further from the European Union.

In late Oct. 2012, President Yanukovich's Party of Regions declared victory in parliamentary elections, with an estimated 33% of the vote. The Fatherland party, the party of jailed ex-Prime Minister Tymoshenko, came in second with around 24%.

On April 30, 2013, the European Court of Human Rights found that the detention of former prime minister Yulia Tymoshenko was arbitrary and unlawful. The judges delivered a unanimous decision citing four violations of Ms. Tymoshenko's rights. While kraine has no intention of appealing the verdict, neither is the government legally obligated to release her or annul her conviction.

Massive Protests Call for Yanukovich's Resignation

Ukraine was close to signing a trade agreement with the European Union in November 2013, but President Yanukovich backed out at the last minute, bowing to pressure from Russian president Vladimir Putin, who threatened financial penalties if Ukraine edged closer to Europe. In addition, Yanukovich refused to comply with an EU demand that Yanukovich release former prime minister Tymoshenko from prison. Tens of thousands of people who favor integrating with Europe, who see such a move as a vital step toward a more promising economic and democratic future, took to the streets of Kiev to protest against Yanukovich's decision. Police responded violently to the protests, using tear gas and truncheons to disperse the crowds in Independence Square.

The protests continued for days, increasing in scope and intensity after the violent response by police. By early December protesters in Kiev had taken over City Hall, the Trade Unions building, and Independence Park, blockaded the Cabinet of Ministers, and were planning to seize the parliament building. Several hundred thousand protesters gathered in Kiev in early December, demanding that Yanukovich resign. During one protest, demonstrators tore down a statue of Lenin. Days later, Yanukovich dispatched police to clear Independence Square with chainsaws and bulldozers, but they withdrew when it was clear the protesters would resume their demonstrations. Yanukovich said he would consider re-opening talks with the EU.

Instead of re-engaging with the EU, Yanukovich reached a deal with Putin in which Russia loaned Ukraine $15 billion and sharply cut oil prices. The Ukrainian government said the aid prevented the country from falling into bankruptcy and will provide economic stability. However, economists said that unless Ukraine increases revenue and cuts spending, the country will once again fall into financial crisis.

The deal did little to quell the unrest, and the protests continued in Independence Square into January 2014. Parliament hastily passed sweeping measures on Jan. 16 that outlawed demonstrations. The protests then turned violent, with demonstrators attacking police. Five protesters were killed in the battles with police. Yanukovich met with opposition leaders, but the negotiations only produced threats. Protesters began to lose confidence in the opposition leaders after they failed to win any concessions from Yanukovich. As the protests spread to cities across the country, Yanukovich offered to install opposition leader Arseniy Yatsenyuk as prime minster. He heads the Fatherland Party, which is also the party of jailed former prime minister Yulia Tymoshenko. Yanukovich offered the post of vice prime minister to another opposition leader, Vitaly Klitschko, a popular former boxer. Both refused the offer, saying the moves only further entrenched Yankovich. On Jan. 28, the president reversed the ban on protests. Prime Minister Nikolai Azarov and his cabinet resigned the same day. Yanukovich named Serhiy Arbuzov as interim prime minister. Amid the turmoil, Putin announced that Russisa would suspend the financial aid package until "we know what economic policies the new government will implement, who will be working there, and what rules they will follow." The news was a serious blow to Yankovich—and the country.

Yanukovich Flees Capital

The protests in Kiev turned violent. On Feb. 20, 2014, riot police and protesters clashed as the demonstrators attempted to reclaim portions of Independence Square, a central plaza in Kiev that police had taken over two days before. More than 100 people were killed and hundreds were wounded. The clash ended with a truce. In a deal between the opposition and Yanukovich brokered by European Union officials on Feb. 21, the president agreed to hold elections by the end of the year and accept a weakening of the presidency. The opposition wanted him to step down immediately, but signed the agreement nevertheless. Russia, however, refused to endorse the deal. After the agreement, Parliament passed a series of measures that illustrated Yanukovich's weakened position. It voted to free former prime minister Yulia Tymoshenko from prison and exonerate her, which will allow her to run for election, grant amnesty to anti-government protesters, and annul constitutional amendments passed in 2008 that expanded the power of the presidency.

The opposition didn't accept the deal and escalated their protests. Yanukovich fled Kiev on Feb. 22, and an interim government was put in place. The next day, Parliament voted to give speaker Oleksandr Turchynov the authority to fulfill the responsibilities of the president. Yanukovich, however, insisted he remained in office. Parliament also appointed Arsen Avakov as temporary interior minister. The interior ministry oversees the police. On Feb. 24, Avakov issued an arrest warrant for Yanukovich, citing the deaths of civilians during the protests. Both the military and the Party of Regions, Yanukovich's party, released statements condemning the deadly crackdown on protesters. The statements indicated that the country may avert a civil war and edge toward stability.

Demonstrations against the turn of events in Ukraine broke out in Simferopol, the capital of Crimea, a pro-Russian region in eastern Ukraine. Masked gunmen, believed to be ethnic Russian extremists, took over several government buildings and raised the Russian flag. The gunmen refused to answer questions about their allegiance or who was commanding them. The next day, on Feb. 28, similarly clad gunmen appeared at two airports in Simferopol. There were no reports of violence by the gunmen, but officials feared a separatist revolt may break out. The Black Sea Fleet, a Russian military base, is located in Crimea, and acting president Turchynov warned Russian troops not to intervene. Russia denied any involvement by its military.

In a speech on Feb. 28 from Rostov-on-Don in southern Russia, Yanukovich declared that he considers himself still to be the president of Ukraine, and called his ouster a "gangster coup." However, he said he believes Crimea should not seek independence from Ukraine. It was his first public appearance since he fled Ukraine.

Russian Troops Sent to Crimea

On March 1, 2014, Russian president Vladimir Putin dispatched troops to Crimea, citing the need to protect ethnic Russians and Russian citizens from extremist ultranationalists, referring to the anti-government protesters in Kiev. He also referred to protesters as "fascists" and "thugs." The Russian troops surrounded Ukrainian military bases and took over government buildings and airports. By March 3, Russia was reportedly in control of Crimea. The move sparked international outrage and condemnation. President Obama called the move a "breach of international law."

In a press conference on March 4, Putin said he didn't see an immediate reason to initiate a military conflict but Russia "reserves the right to use all means at our disposal to protect" Russian citizens and ethnic Russians in the region. In the middle of the crisis, Russia test-fired a nuclear-capable intercontinental ballistic missile, but said it was scheduled before the turmoil began and was not related to the political turmoil.

U.S. secretary of state John Kerry traveled to Kiev in a show of support for the interim government. He visited shrines erected in memory of slain protesters and pledged $1 billion in aid and loans to Ukraine. He scolded Putin's military incursion into Crimea. "It is not appropriate to invade a country and at the end of a barrel of a gun dictate what you are trying to achieve," he said. "That is not 21st century, G-8, major-nation behavior." Russia was set to host the June meeting of the G8, but other member nations halted planning for the event.

On March 6, the U.S. imposed sanctions on officials, advisers, and other individuals who have been involved in the underminding of democracy in the Crimea. The sanctions involved revoking visas for travel to the U.S. for those who hold them and refusing visas for those seeking them. The European Union pledged $15 billion in aid to Ukraine. The Crimean Parliament approved a referendum, scheduled for March 16, asking voters if they want to secede from Ukraine and be annexed by Russia. "In 2014, we are well beyond the days when borders can be redrawn over the heads of democratic leaders," U.S. president Barack Obama said in response to the move. Ukraine's acting president, Oleksandr Turchynov, threatened to dissolve the Crimean Parliament.

Putin Announces Annexation of Crimea

Nearly 97% of voters in Crimea chose to secede from Ukraine in the referendum on March 16, 2014. The next day, the Crimean Parliament declared the region independent and formally sought annexation by Russia. Putin said the vote was legal and binding, and in a statement the Kremlin said, "The referendum was organized in such a way as to guarantee Crimeas population the possibility to freely express their will and exercise their right to self-determination." Obama told Putin that neither the U.S. nor the international community would recognize the results of the referendum. He said the referendum "violates the Ukrainian Constitution and occurred under duress of Russian military intervention." On March 17, Obama imposed economic sanctions on 11 Russian officials and Putin advisers, including Crimean prime minister Sergey Aksyonov, who were "responsible for the deteriorating situation in Ukraine." The sanctions freeze the assets held in the U.S. and ban Americans from doing business with those sanctioned. The European Union enacted similar sanctions.

Putin signed a treaty stating that Russia had annexed Crimea on March 18, saying he was reclaiming territory that was part of Russia from 1783, when Empress Catherine II took it over from the Ottoman Empire, to 1954 when Nikita Khrushchev transferred the region to Ukraine. "Crimea has always been an integral part of Russia in the hearts and minds of people," Putin said. After signing the treaty, Putin gave a speech that both defended his move, denounced internationally as a land grab, and lashed out at the West. "Our Western partners have crossed a line," he said, referring to the West's support for Kiev. "We have every reason to think that the notorious policy of confining Russia, pursued in the 18th, 19th and 20th centuries, continues today." The move further deteriorated Russia's relationship with the U.S. and Europe. It also complicated any hopes for a peace agreement in Syria and cast a cloud over the talks over Iran's nuclear program. Neither the U.S. nor the European Union recognized Crimea as part of Russia.

On March 21, the European Union and Ukraine signed a portion of the EU Association Agreement—the same deal that former President Yanukovich refused to sign, sparking the unrest. The section that was signed lends Ukraine political support; the economic part will be enacted once a new president is elected. U deal that former President Yanukovich refused to sign, sparking the unrest. The section that was signed lends Ukraine political support; the economic part will be enacted once a new president is elected. kraine withdrew its military from Crimea on March 24, citing a threat to the soldiers and their families. The members of the Group of 8 industrialized nations announced on March 24 that they had suspended Russia from the group and moved the upcoming meeting from Sochi, Russia, to Brussels.

The UN General Assembly passed a resolution on March 27 that declared Russia's annexation of Crimea illegal and described the referendum on the issue as "having no validity." One hundred countries voted in favor, 11 voted against, and 58 abstained. The resolution has no enforcement power, making it symbolic. Nonetheless, it clearly sent Putin a message. On the same day, the International Monetary Fund agreed to loan Ukraine $17 billion as long as the country implemented several austerity measures, and the U.S. Congress approved a $1 billion aid package. The aid will boost the faltering economy and help it meet its debt obligations.

Unrest Spreads to Other Eastern Cities

After annexation, Putin continued to deploy troops on the southern and eastern border with Ukraine, areas that are dominated by ethnic Russians, raising fears that he may attempt to take over additional regions of the country. By the end of March, there were as many as 40,000 Russian troops stationed on the border.

Those fears were realized in early April, when pro-Russian protesters and armed militants in the eastern capital cities of Donetsk, Kharkiv, and Luhansk took over several government buildings and police stations. They also announced they were forming an independent republic and would hold a referendum on secession from Ukraine and annexation by Russia in May, clearly borrowing from the playbook used in Crimea. About a week later, pro-Russian armed militants carried out similar actions in other cities in the region. Oleksandr Turchynov, Ukraine's acting president, threatened the pro-Russian militias with an "antiterrorist operation" if they didn't withdraw. The militants ignored the ultimatum and Turchynov asked the UN to dispatch a peacekeeping force to the eastern part of the country. Putin and Russian Foreign Minister Sergei Lavrov repeatedly denied the government orchestrated the demonstrations.

On April 17 in Geneva, representatives from the U.S., Russia, Ukraine, and the European Union reached an agreement intended to de-escalate the tension in eastern Ukraine. The agreement stated that all illegal armed groups will lay down their arms and all buildings seized illegally will be surrendered. Both sides agreed to end the violence and intolerance, with anti-Semitism being singled out. Protesters who are not suspected of committing capital offenses will be granted amnesty if they surrender their arms. The statement also said while drafting a new constitution, Ukraine will make the process inclusive, transparent, and accountable. Russia did not commit to withdrawing the 40,000 troops it has massed on the Ukrainian border. The diplomats also discussed a proposal by acting Ukrainian Prime Minister Arseniy Yatseniuk to decentralize power and give the regional governments increased authority, but federalism was not covered in the agreement.

The pro-Russian separatists refused to vacate the buildings they have occupied, saying they would not leave until the government in Kiev, which they do not recognize, steps down. Their defiance jeopardized the entire agreement. Turchynov ordered "antiterrorist operations" against the pro-Russian militants on April 22, but quickly withdrew troops without dislodging them from occupied buildings.

In response to Russia's refusal to comply with the agreement reached in Geneva to rein in the pro-Russian groups, the U.S. imposed additional sanctions in late April on seven Russian individuals, including Igor Sechin, the head of Russia's largest oil producer, and 17 companies with close ties to Putin, targeting some of the country's wealthiest and most powerful businessmen. The sanctions, announced on April 28, put a travel ban on the individuals and froze the assets of the officials and the businesses. They also restricted the import of U.S. goods that could be used for military purposes. The European followed with similar sanctions. The EU in general has been more reluctant than the U.S. to impose severe financial sanctions on Russia because of the closer economic ties between many European nations and Russia and Europe's reliance on Russia a source of energy. Nevertheless, the sanctions have begun to take a toll on Russia's economy. Standard & Poors cut Russia's rating, leaving it just one notch above junk status, investors have withdrawn about $50 billion from the country, and the stock market has fallen 13% in 2014.

By the end of April, acting president Turchynov acknowledged that pro-Russian separatists were in control of much of eastern Ukraine and had met little if any resistance when taking over government buildings in a steady stream of about a dozen eastern cities. "The majority of law enforcers in the east are incapable of performing their duties," he said.

Despite Turchynov's statement about the inept police, the Ukrainian government launched an offensive in the rebel-held eastern city of Sloviansk on May 2. The separatists shot down two Ukrainian military helicopters in the fighting. The turmoil spread to Odessa, a strategically important port city in the Black Sea area, and about a dozen people were killed in battles between separatists and advocates of Ukrainian unity. In addition, more than 40 people, mostly pro-Russian separatists, died in a fire in Odessa when the building they had locked themselves in went up in flames.

As the fighting and chaos escalated in eastern Ukraine and the U.S. and Europe threatened additional sanctions, on May 7 Putin unexpectedly announced the withdrawal of the 40,000 troops from the border with Ukraine, urged separatists to abandon plans for a referendum on autonomy, called the nationwide elections set for May 25 in Ukraine are "a step in the right direction," and said Russia would participate in negotiations to end the crisis. "I simply believe that if we want to find a long-term solution to the crisis in Ukraine, open, honest, and equal dialogue is the only possible option," Putin said. Both the U.S. and European officials responded with a heavy dose of skepticism that Putin would follow through. The pro-Russian separatists said they would hold the referendum on May 11 despite Putin's request.

Referendums on Autonomy Held in Other Eastern Regions

The referendums on regional autonomy were held in Donetsk and Luhansk on May 11. Both provinces overwhelmingly approved the referendums; 90% of voters in Donetsk voted in favor of self-rule, and 96% did in Luhansk. Acting President Turchynov denounced the votes as "a farce." The U.S. and several European nations also dismissed the referendums. Polls showed, however, that the results were not an accurate reflection of how a majority of eastern Ukrainians felt about independence. Most prefer to remain part of Ukraine; only those in favor of autonomy turned out to vote. Russia expressed little appetite for annexing either region, reluctant to take on the economic burden or risk further sanctions.

On May 15, thousands of unarmed steelworkers and miners took to the streets in Mariupol, the region's second-largest city. The pro-Russian separatists withdrew, ceding control of the city. Workers in several other cities followed by the end of the day. They were urged on by Rinat Akhmetov, the country's richest man who employs the miners and steelworkers, who said they may lose their jobs if Russia annexed the region. Mariupol was the site of deadly battles between government troops and separatists a week earlier. As many as 20 separatists were killed when troops fired on the police headquarters building that the separatists had attempted to seize.

Billionaire Businessman Wins Presidential Election

Petro Poroshenko, a pro-European billionaire who previously served as a finance and foreign minister, breezed to victory in the special presidential election on May 25, taking about 55% of the vote and, enought to avoid a runoff. Former prime minister Yulia Tymoshenko, who was recently released from prison, placed a distant second with 13%. Poroshenko, who made his fortune in the candy industry and is known as the Chocolate King, inherited a country mired in a civil war and financial disarray. He also must deal with Ukraine's tense relationship with Russia.

"The first steps of our team at the beginning of the presidential work will be to put an end to war, to put an end to chaos, to end disorder, and to bring peace to the land of Ukraine united, unitary Ukraine," Poroshenko said in a speech declaring victory.

A day after the election, pro-Russian separatists attempted to take over the airport in Donetsk. The government in Kiev dispatched the military and fighter jets to take back the airport. About 50 militants were killed in battles with the military. The militants later shot down a military helicopter, killing 14 people.

Days before Ukraine's presidential election, Russia withdrew its troops from the border with Ukraine, a clear sign Putin was beginning to back off his antagonistic stance toward its neighbor. In addition, Putin praised the election and promised to work with Poroshenko. In late June, he requested that the upper house of Parliament rescind its authorization for Putin to use force in Ukraine. However, in early July, Putin once again actively inserted himself in the crisis, cutting off gas supplies to Ukraine. In addition, arms continued to flow from Russia to the separatists and Putin did little to stem the continuing violence.

After the rebels shot down a military transport jet and killed 49 people, Poroshenko declared a week-long, unilateral ceasefire on June 20. After initially resisting, the rebels agreed to observe the temporary ceasefire. Poroshenko ended the ceasefire after ten days, claiming the rebels continued to attack government troops.

Passenger Jet Crashes in Eastern Ukraine

A Malaysia Airlines Boeing 777 crashed in eastern Ukraine near the Russian border on July 17, killing all 298 passengers and crew members. The crash occurred in territory where pro-Russian separatists have been battling Ukrainian troops. President Poroshenko said the crash was an act of terror. "I would like to note that we are calling this not an incident, not a catastrophe, but a terrorist act," he said. Ukrainian, European, and American officials said the plane was shot down by a Russian-made surface-to-air missile, citing satellite images. The plane took off from Amsterdam and was headed to Kuala Lumpur, Malaysia. Poroshenko accused the separatists of launching the missile, which they denied. Russian president Putin also denied having any role in the disaster.

A day after the crash, President Obama said he believed that the rebels shot down the plane. He called the crash a "global tragedy" and faulted Putin for continuing to arm the rebels and for not stopping the fighting. Most analysts said rebels may have thought they were targeting a military transport plane rather than a commercial jet. A day before the crash, the U.S. imposed further sanctions on Russia in response to Putin's refusal to stop arming the separatists. The latest round of sanctions are the most punitive yet against Russia and target large defense and energy firms and banks. Previously, only Russian individuals and the businesses directly related to the destabilization in Ukraine had been sanctioned. The U.S. began providing rebels with nonlethal aid, including military advice, intelligence, and body armour. Officials from the U.S., Ukraine, and NATO said they believe that not only is Russia arming the rebels, that the country is also firing rockets from inside Russia.

The European Union and U.S. imposed a coordinated round of broad sanctions on Russia on July 29. The sanctions place an embargo on new weapons sales to Russia, limit the sale of some technology and equipment to the oil industry, and ban Europeans and European companies from doing business with Russian-owned banks. Businesses and several individuals closely connected to Putin were also affected by the sanctions, which are the toughest imposed on Russia since the Cold War. In response, Putin banned the import of food from countries involved who imposed the sanctions.

The rebels were criticized for denying outside access to the bodies of the victims and to the crash site. The separatists transported the bodies to refrigerated train cars in Torez, another rebel-controlled city in eastern Ukraine. They were also accused of removing important evidence from the crash site. On July 22, the rebels transported the bodies and the flight recorders to Kharkiv, a government-controlled city, but they still refused to allow inspectors to investigate the wreckage.

The Netherlands' air safety board, which investigated the crash of Malaysia Airlines Flight 17, released a preliminary report in early September and determined the plane was brought down by "high-energy objects from outside the aircraft." The report confirmed that a missile caused the crash. The report did not say who launched the missiles. It did rule out either pilot error or a mechanical problem with the plane.

Prime Minister Yatsenyuk resigned on July 24 when two major parties, Svoboda and Udar, bolted from the governing coalition. Parliament, however, rejected his resignation.

Offensive by Ukrainian Military Results in Gains; Rebels, Government Agree on Cease-Fire

The Ukrainian military began an aggressive campaign in early July, using airstrikes to back up ground troops. The military forced rebels from the towns of Sloviansk, their military headquarters, and Kramatorsk; surrounded Donetsk, the largest city in eastern Ukraine; and took control of some of the border crossings through which Russia had been arming the rebels. The offensive was not without cost: by the end of July, about 1,130 people had been killed, including about 800 civilians. Russia responded by massing about 20,000 troops on the border with Ukraine.

The rebels continued to struggle into August, as government troops moved into Luhansk and Donetsk, former rebel strongholds. In addition, many rebels were reported to have abandoned the fight. Two days after Poroshenko and Putin met to discuss options to end the conflict, NATO, citing satellite images, reported that Russia sent 1,000 troops into Ukraine from the southeast, opening a new front in the conflict. Russia has long denied it had dispatched troops to Ukraine, and said the troops entered Ukraine "accidentally."

"Over the past two weeks we have noted a significant escalation in both the level and sophistication of Russia's military interference in Ukraine," said NATO's Brig. Gen. Nico Tak in a statement released in late August.

On September 5, representatives from the Ukrainian government, the Russian-backed separatists, Russia, and the Organization for Security and Cooperation in Europe who had been meeting in Minsk, Belarus, announced that they had agreed on a ceasefire. The terms include an immediate end to fighting, the exchange of prisoners, amnesty for those who did not commit serious crimes, a 6-mile buffer zone along the Ukrainian-Russian border, decentralization of power in the Donbass region (the area dominated by the Russian-backed rebels), and the creation of a route to deliver humanitarian aid. It also said local elections will be held under terms of Ukrainian law. "The whole world is striving for peace, the whole of Ukraine is striving for peace, including millions of citizens in Donbass," Poroshenko said in a statement. "The highest value is human life, and we must do everything possible to stop the bloodshed and put an end to suffering." Despite the cease-fire, both sides continued to attack each other.

On September 16, Ukraine's parliament and the European Parliament ratified the EU Association Agreement—the deal that former President Yanukovich refused to sign, sparking the protests that led to Yanukovich's ouster. The agreement will not be fully implemented until the end of 2015, leaving some concerned that it will be watered down by the time it's in place. Ukraine's parliament also voted to give the rebel-controlled areas of the Donbas region increased autonomy and self-governance and maintain Russian language rights for three years. It also granted amnesty to rebel fighters.

Pro-Western Parties Dominate Parliamentary Elections

In October 2014, Human Rights Watch said it had evidence that the Ukrainian army attacked civilian-populated areas of rebel-held Donetsk with cluster bombs on twice occasions. The bombs, which scatter dozens or more bomblets, are banned by may countries. Ukraine denied the accusation, which if proves correct, could discourage the population in the east from engaging with the government.

Parliamentary elections were held in late October. As expected, the pro-Western parties of President Poroshenko and Prime Minister Yatsenyuk dominated, but neither won an outright majority. In an upset, Yatsenyuk's Peoples Front party defeated Bloc Petro Poroshenko by a slim margin: 22.2% to 21.8%. They will likely form a coalition government. Crimea did not participate in the election, nor the rebel-held areas, which said they would hold their own elections. The Opposition Bloc, made up of loyalists of former President Yanukovych, garnered 9%, enough to take seats in parliament. The new government will have to carry out reforms, including scaling back the size of government and rooting out corruption, to receive aid from the International Monetary Fund. Fiscally strapped, the country also needs find the funds to make a $1.5 billion debt payment to Russia, else jeopardize future oil deliveries.

Elections were in fact held in Luhansk and Donetsk, separatist-controlled areas of eastern Ukraine, in early November 2014, in violation of the cease-fire agreement signed in Minsk in September. The the Ukrainian government, U.S., and EU said they would not recognize the results of the election. Russia declared the results as binding.

Cease-fire in Tatters Amid Resurgence of Fighting

The elections in Luhansk and Donetsk in November 2014 were hardly the only violations of the cease-fire. Violence was rampant almost since the agreement was signed, with both the separatists and the Ukrainian military accusing each other of attacks. Between the signing of the cease-fire and early December, about 1,000 civilians and soldiers were killed—about 25% of the total 4,300 military and civilian fatalities. In addition, NATO reported that Russia has continued to supply the rebels with combat troops, vehicles, backing up claims by the Ukrainian government. The cease-fire was all but shattered in January 2015 when the fighting between separatists and the government intensified in eastern Ukraine, rebels took over the Donetsk airport, and evidence mounted that Russia was supplying the rebels with increasingly sophisticated weapons. President Poroshenko said as many as 9,000 Russian soldiers were taking part in the fighting in Luhansk and Donetsk, a claim Russia denied.

Expectations Low for Renewed Truce Agreement; Economy in Tatters

Amid the crisis, the leaders of Russia, Ukraine, Germany, and France met in February 2015 to try to resurrect the peace agreement signed in September 2014 in Minsk, called the Minsk Protocol. On Feb. 12 after 16 hours of negotiations, the parties agreed to a cease-fire, which would go into effect on Feb. 14, and to end the war in eastern Ukraine. However, some terms of the agreement left many skeptical that the cease-fire would hold. For example, the location of the truce line was not defined. They did agree that both sides would remove heavy weapons and release prisoners, the constitution would be amended, the separatist regions of Donetsk and Luhansk would be given "special status," and foreign troops and weapons will be withdrawn.

Between the signing of the accord and its implementation, shelling continued in Debaltseve, a contested town that's the site of a railroad hub that links Donetsk and Luhansk, rebel strongholds. Some 8,000 troops had been under seige in the town since the fall of 2014. Rebel leader Aleksandr Zakharchenko said the cease-fire did not apply to the town. On Feb. 16, rebels took control of Debaltseve and Ukrainian troops withdrew from the town. It was considered one of the worst defeats for the military.

The war in eastern Ukraine took its toll on the country's economy. Facing bankruptcy, Ukraine appealed to the International Monetary Fund. In February 2015, it pledged $17.5 billion and potentially $40 billion over four years if Ukraine complied with economic reforms that will promote economic growth.